Is Samsung Electronics' Hurdle Clearing?... Target Price Surges, Driven by New Product Mix Expansion and Yield Improvement [Click eJongmok]

“Samsung Electronics Improves HBM4 Yield
Target Price Raised to 450,000 Won”

On September 1, LS Securities stated that concerns about mass production for Samsung Electronics are easing, citing the increased shipment share of the next-generation High Bandwidth Memory (HBM), HBM4, and improvements in yield rates. The company raised its target price from 400,000 won to 450,000 won, while maintaining a "Buy" investment rating.

Yonhap News Agency

Jung Woosung, an analyst at LS Securities, noted in a report released the same day, "The share of HBM4 in Samsung Electronics' HBM shipments rapidly increased from around 5% in the first quarter of this year to approximately 35% in the second quarter." He added, "Although the share of new products is expanding sharply, the mixed HBM yield rate for the second quarter is estimated to have improved by more than 5 percentage points quarter-on-quarter."

Jung further commented, "Unlike the initial mass production phase for HBM3E, it appears that Samsung Electronics has secured relatively high mass production capability for HBM4." He analyzed, "If the mixed yield further improves during the process of expanding HBM4's share, the pace at which increased HBM sales translate into overall profitability improvements could surpass previous expectations."

Previously, Samsung Electronics' HBM business faced valuation discounts in its share price compared to competitors due to customer certification delays and lower mass production capability. Jung assessed, "With both the shipment mix expanding and yield rates improving for HBM4, these discount factors are likely to gradually diminish." He diagnosed, "Once HBM4 begins to contribute more significantly to the memory business's profits, this will also bring positive changes to the profit structure, which has been primarily centered around conventional DRAM."

Jung added, "Although memory supply shortages are expected to persist in the mid- to long term, the increased allocation of memory within server budgets due to price hikes means there may be less room for additional price increases than before." He said, "Going forward, stock price movements will likely be more sensitive to the expansion in HBM4 supply and the growth rate of new AI demand sources, rather than memory price trends themselves."

This content was produced with the assistance of AI translation services.